Fiscal Cliff - where are the cuts?

obama has laid out a plan to avert a fiscal crises. the plan is heavy on tax increases and is way too light on cuts. the plan should be 50/50. if there is $1.6 trillion in increased revenue then $1.6 trillion in cuts needs to be found.

Presume the increased revenue as proposed. Now lets identify some cuts.

For starters: No extension to unemployment benefits, enough is enough. Also raising the retirement age is another item.

But our elected officials on both sides are so inept. In the end, there will be zero spending cuts and zero tax increases. So it will be 50/50. We're gonna kick the can down the road again and rack up another 1.2 trillion in debt next year.

that's a pretty simplistic approach, hooper, because the economy is a large, dynamic animal. and government revenue depends largely on how well the economy is working.

returning tax rates on higher incomes to previously functional levels is an expedient, because the economy is not recovering quickly enough to prevent the government from running budget deficits for the immediate future.

however, if the current economic trends continue, we'll get there, with or without tax increases.

but, yes. we should cut some of the fat. the political problem is what various factions consider fat, and what they consider muscle.

you want cuts? start with defense contracting. lots of redundancy there, and there are a lot of jobs being done by contractors that could be done more cheaply by federal employees.

like the army peeling its own potatoes for a change.

gotta be careful, though. lots of cuts will lead to even higher unemployment. one of the worst unemployment factors in the past 4 years has been the layoff of hundreds of thousands of federal and state employees due to budget-cutting. and because of that budget-cutting governments have less money to bid for private contracts to build and maintain things.

that's why ARRA - aka "porkulus" - was a good idea. not great, mind you, but good and necessary.

The trouble with this analysis is that it ignores history: As part of the 2011 Budget Control Act, Obama agreed to spending reductions of about $1.5 trillion over the next ten years. If you count the interest, the savings is actually $1.7 trillion. Boehner should have no problem remembering the details of that deal: As Greg Sargent points out, Boehner at the time actually gloated about the fact that the deal was "all spending cuts."

And now, with this latest offer, Obama is proposing yet more spending reductions, to the tune of several hundred billion dollars. Add it up and it’s more than $2 trillion in spending cuts Obama has either signed into law or is endorsing now. That’s obviously greater than the $1.6 trillion in new tax revenue he’s seeking.

government spending as a percentage of GDP has been dropping since obama took office. GDP growth has been slower, of course, but it's still rising.

the problem is that government revenue as a percentage of GDP has been flat or falling, too.

like i've said before - yeah, we need to cut spending. but you can't cut your way to a balanced budget. it's impossible. with a roughly $3.6 trillion budget, and a $1.1 trillion deficit, you'd have to cut almost half of the budget merely to balance it and start paying the interest.

we have to grow government's share of GDP until we get to a manageable and sane place.

and in the interest of improving the dialogue and civility, i understand what you mean by "entitlement," skeeter. but i still hate that term.

you'd feel the same way if i started calling the mortgage interest deduction an entitlement, even though everyone with the ability to do so takes advantage of it. some more than others. does that make the rich more entitled than the middle class?

people pay good money in good faith into social security and medicare for 40 years or more, and they expect to see a return. no, it isn't a retirement plan; they should plan on that on their own. but those programs are designed to be there so that no matter how bad shit gets, pensioners always have enough money to keep them from dying on the streets.

those programs can be tweaked to make them more solvent, but they shouldn't have a meat axe taken to them just to square the ledger sheet.

I pretty much agree with you redblack. We cannot balance the budget by spending cuts alone. Not without abandoning our responsibility to care for the poor, sick, and elderly. Tax increases will simply have to be a significant portion of a balanced budget.

I recently heard on NPR that spending on food stamps/EBT has quadrupled since 2000. Look, I’m no expert on food and nutrition. I don’t know how people fed themselves before 2000. But when I hear a statistic like that, I have to think there is some room for responsible spending cuts as well. I must admit I got really upset when I saw that Starbucks has signs in some of its stores advertising they accept EBT. I don’t think our government should be borrowing money from China so poor people can eat $3.49 scones.

But again, I agree with your basic point that tax increases should be part of a balanced budget. Republicans will not publicly admit it, but every Republican with half a brain realizes we cannot balance the budget by spending cuts alone.

Side note – I’m a big fan of social security. Mandatory participation in a basic safety net is a good thing.

Which is really also representing the perpetual divide in this country...

If 20 of you (representing yourselves) can't agree on this forum on where to start...then most certainly...the elected officials representing 300+ million are bound to have a little stick up their kazoos about the issue...

Where to start? Line by line in ALL Departments still seems like a good idea...

I am most certain there are still plenty of $500 pens and screws being bought by idiot federal accountants...

"I recently heard on NPR that spending on food stamps/EBT has quadrupled since 2000. Look, I’m no expert on food and nutrition. I don’t know how people fed themselves before 2000. But when I hear a statistic like that, I have to think there is some room for responsible spending cuts as well."

so you actually know how much money an individual gets on food stamps to feed themselves for a month hoop? I can bet you that you would have a difficult time doing so because i know that i can't do it.

now.. take away your pantry and your fridge and your stove and your microwave.. and figure out how to feed yourself.. because that's what homeless people do.

food stamp dollars have risen because poverty has risen hoop... and too many of those are our working poor.. that's people with jobs who income is still low enough to qualify them for food stamps.

"i see many 72 year old's that are very active! raising the retirement age should be the easiest task at hand."

so if i had a construction company and sent a 72 year old to hang drywall, you wouldn't mind that the job took longer to do because of the physical capacity of that worker?

I am thinking you would be yelling like a banshee... but that would be the reality if you got your way.

people whose bodies wear out doing physical work need that retirement hoop.

It's one thing for a 72 year old individual to choose to work as long as physically and mentally able to do so. It's another to be forced to work until you drop dead regardless of any hardship, be it physical or financial. No civilized country in the world would even consider such policies.

There is also the problem with 65+ y.o. folks hanging on to good-paying jobs so young people have no opportunities to save to raise a family, pay off student loans, etc. getting older folks out of the job market is a good thing for the next generation. most still have to supplement their social security (which they paid into their entire working life so they are entitled to getting it back when they're older -- that was the plan) with at least a part-time lower paying gig.

"The democrats are going to have to get this done on their own somehow."

I don't think so. The Democrats don't have to do anything. And I, for one, hope they don't. They're holding the boss card on this one. Obama is offering a deal that, if he were working with folks that show good faith, would be a slam dunk. Keep the middle class tax cuts, have a nice holiday, and when we come back to work we'll get busy on the rest of it and have serious negotiations. But the Repubs seem to have lost the ability to deal in anything other than hostage style negotiation. After 4 years of putting up with their cr*p, I'm hoping the "Mr Nice Guy" Obama is exchanged for the "I Drink Your Milkshake" Obama.

To answer the question: at the bottom, in a shoal, with lots of rocks. Why hasn't anyone said it on this topic: JUMP! Go ahead and a try it. Give it a little fall. It's just money. And, perhaps, a dip will end in a rise. We are buoyant.

hooper: not sure why you are bound and determined to make me pick up 80-pound sacks of mortar and concrete blocks and scaffold planks until i'm 72. what the hell did i do to you, anyway? something in a past life, maybe?

no, sir. i'm going to rest and have a well-earned retirement at 62 - if not sooner - and i'm going to live to 112 just to piss you off.

shed: i agree. let's return the tax rates to where they were and let's have the defense cuts.

and hooper can get his cuts to social security and medicare, too.

and maybe moody's or whoever will give us our bond rating back for playing nice.

Hooper, so far I've seen no proposal from the R's other than to cut SS and Medicare. There's a whole lot of other cuts that can be made before we have to go there. SS does not affect the deficit, and should not be part of these negotiations. It's a separate issue. Medicare can be easily tweaked around the edges without cutting benefits. A start would be to allow the program to negotiate drug prices with the pharmaceutical companies.

As for your last statement about dividends and retirement, this is not true for most retired people. The majority of retirement savings are in qualified retirement plans like IRA's and 401k's. When you take money out of a retirement plan it is taxed as income, not dividends or capital gains.

At this point the D's are being smart. they've given their proposals, and the ball is now in the R court. By not proposing lots of cuts, Obama is giving the R's some political room to make a deal because whatever cuts are eventually made they will be able to take some credit for and look better to their base. Everybody's got lots of donors and supporters to consider in the deal making process. Wish they didn't have to do it that way and could just do what's best, but until we get the money out of politics, the donors will drive the conversations.

it doesn't suck for you, if you benefit from the austerity cuts that you want to give me, and my minimum already income and benefits. Basically that's what you want...right? Something for you....to make your life easier/better, your coffers more full...

you're old, poor, can't afford insurance, then die. You can't afford food? Too bad, suck it up - bread and water for you! Your school age children can't afford school lunches? Wow...then don't eat, why should I subsidize that? So what if they can't learn on an empty stomach. Nursing home?..privatize it (like it doesn't already cost you everything you have)..you caused your own problems, and they have nothing to do with Hooper...am I reading this right?

We should raise the maximum tax rate back to where it was when Saint Ronnie took office, close all business loopholes that have the affect of moving jobs off US territory and end any tax preference for foreign investment.

Then, the defense budget should be trimmed to a per capita amount equal to what it was in 1980 in todays dollars.

Defense should be for US territory, military power should be used to protect Americans where they live, if on US territory.

Are you really as ignorant of the impact of the policies you promote on other people's lives as you would have us believe?

you must be aware that women already receive less benefits than men because their wages are not equal to men's and wages are what determines your benefits.

you must know that the poverty rates for senior women far exceed those for senior men...

and you would like to make that worse?

while you are on your high horse
i would like you to look around and ask yourself just what your life would like look right now if you hadn't had whatever safety net it is that you have that kept some of your bad decisions from landing you on the streets...

because based on what you post, i can guarantee you have made some whoppers.

it really is true that you get out of life what you invest into it
and i am not talking just bank accounts

mean people lead mean lives hoop...
you might ask yourself if that is really the example you want to set for your children
because sooner or later you will have to depend upon them...

in the end.. we are all dependent upon someone
that's if we are lucky enough to have someone to depend upon

All over the globe, austerity sucks. From streets all over Europe, headlines are reading: "Austerity Sucks!"

Practically nobody (in the short term) benefits from austerity. Politicians don't, cuz constituants hate them for it, voting them out. Old people don't, for sure, cuz they want to spend now and push the invoice into the future when they're dead or nearly so. Businesses don't, particularly those who depend on government contracts. Perhaps bond-holders do benefit from austerity, at least to the degree their bonds continue paying and maturing and all is well in ratings land... pension plans hold lots of bonds, 401k plans, banks hold them, and governments hold them too.

If austerity IS implemented tho, the biggest beneficiaries will be the infants and little kids living today -- damn, it's too bad they can't vote! When they grow up, they will not live their lives as OUR debt slaves, if we cut spending now. The younger you are, the more you stand to benefit, regardless of your class. So, care about kids' future much?

Raising the SS age does impact everyone in the same way, however you can't implement anything that doesn't produce different effects in individuals. But that distinction isn't a reason not to implement something. We have endless examples. Taxes, food, rain, cold, heat, laws, etc... almost any condition will *produce* a different effect for each individual, even when each condition is equally applied and distributed. This truth has always been so and will evermore be so. amen. :)